Kate Spade & Co
Michael Kors Acquires Jimmy Choo for $1.2 Billion
On July 25, Michael Kors (KORS) announced that it has entered into a definitive agreement to acquire Jimmy Choo (CHOO) for $1.2 billion. Let’s look at what Michael Kors could gain from the acquisition.
Coach Is Trading at the Upper End of Its Valuations
Coach’s one-year forward earnings multiple surged to 20.7x versus a three-year average of 18.3x.
Coach Receives 78% ‘Buy’ Ratings from Wall Street Analysts
Of the analysts that cover Coach (COH), 78% recommend a “buy” on the stock, 25% recommend holding it, and 3% suggest selling it.
Coach’s Comeback Story and Strategy Change
Coach pulled out of 250 department stores in the US during its last reported quarter, reducing the department store count by ~25% in 2017.
Coach Is This Year’s Showstopper among Apparel Stocks
Coach (COH), one of America’s leading handbag designers and sellers, has risen 35% year-to-date. Coach recently announced the acquisition of rival Kate Spade (KATE) for $2.4 billion.
Michael Kors Stock Slides after Its Fiscal 4Q17 Results
Michael Kors (KORS) has a strong cash flow position. The company ended fiscal 4Q17 with cash and cash equivalents of $228 million and net debt of -$95 million.
KORS Issues Disappointing Guidance after Weak Fiscal 4Q17 Results
For fiscal 1Q18, Michael Kors’ (KORS) management is looking for EPS of $0.60–$0.64 on total sales in the range of $910 million–$930 million.
Michael Kors Challenged in Retail and Wholesale Sales in Fiscal 2017
Michael Kors (KORS) reported an 11.2% year-over-year decline in its fiscal 4Q17 sales to $1.2 billion, beating Wall Street by ~$10 million. For fiscal 2017, KORS’ total sales fell 4.6% to ~$4.5 billion.
KORS Beats on Earnings and Revenues, Lowers Guidance for Fiscal 1Q18
Michael Kors (KORS) reported fiscal 4Q17 EPS of $0.73, $0.03 higher than analyst estimates. KORS’ revenues fell 11.7% year-over-year to ~$1.1 billion, beating the consensus by $10.0 million.
Coach Is Set to Buy Kate Spade for $2.4 Billion
Coach (COH), America’s leading luxury handbag and accessories maker, is buying Kate Spade (KATE) for a total transaction value of $2.4 billion.
Understanding Coach’s Stock Jump after Its Latest Earnings Beat
Coach’s (COH) stock price rose 11.4% to $43.15 after it reported its results on May 2. The company is currently sitting on a YTD profit of 23%.
What Drove Coach’s Fiscal 3Q17 Earnings?
Coach (COH) reported a 5% YoY rise in its EPS for fiscal 3Q17, registering $0.46 per share.
Inside Coach’s Key Sales Drivers in North America in Fiscal 3Q17
The Coach brand’s North America sales, which accounted for 48% of the company’s top line, fell 5% YoY to $474 million.
Coach’s 3Q17 Earnings Story: Earnings Beat, Revenue Miss
For fiscal 3Q17, Coach reported earnings of $0.46 per share, beating the Wall Street analyst average estimates by $0.02.
Why Did Kate Spade Stock Plunge 15% on April 4?
Kate Spade’s (KATE) share price tanked 14.6% on Tuesday, April 4, as Reuters reported Monday evening that the handbag manufacturer had sought more time from Coach (COH) to consider its buyout offer.
Key Drivers of VF Corporation’s Top Line in Fiscal 4Q16
VF Corporation’s D2C revenues rose 11% YoY, gaining strength from a mid-teen surge in the Outdoor & Action Sports and a low double-digit rise in Jeanswear.
VF Corporation Delivers a Flat Top Line in Fiscal 4Q16
VF Corporation’s (VFC) top line from continuing operations remained almost flat during fiscal 4Q16. Its total revenues stood at ~$3.3 billion, missing Wall Street estimates by $120 million.
Robust Online Sales Boost Kate Spade’s 4Q16 Top Line
Kate Spade New York (KATE) reported a 10% rise in its 4Q16 sales to $471 million. Its 4Q16 comps stood at 9.3%, compared to 3Q16’s 7% and 2Q16’s 4% comps growth.
KATE’s 4Q16 Profitability Improves on Better Cost Controls
KATE’s strict cost-control measures resulted in a 390-basis-point fall in its selling, general, and administrative rate, which fell to 39.1% of its sales in 4Q16 from 43.0% in 4Q15.
KATE Stock Jumps 15% as It Confirms Strategic Alternatives
Kate Spade New York’s stock price made big strides yesterday after the company confirmed that it was reviewing strategic alternatives while reporting its 4Q16 results.
Kate Spade Beats Earnings, Confirms Strategic Review
New York–based Kate Spade (KATE) reported its 4Q16 results on February 16, 2017. The company’s earnings per share stood at $0.41.
Ralph Lauren Touches 6-Year Low on CEO Surprise
RL is currently trading 48% below its 52-week-high price and has fallen 15% YTD.
Telsey Downgraded Kate Spade & Company to ‘Market Perform’
On January 25, 2017, Telsey downgraded Kate Spade’s rating to “market perform” from “outperform.” It reported fiscal 3Q16 net sales of $316.5 million.
Coach: CLSA and Atlantic Equities Downgraded Its Rating
On January 25, 2017, CLSA downgraded Coach’s rating to “outperform” from “buy.” Atlantic Equities downgraded Coach’s rating to “neutral” from “overweight.”
Bank of America/Merrill Lynch Downgrades Kate Spade to ‘Neutral’
Kate Spade (KATE) reported fiscal 3Q16 net sales of $316.5 million—a rise of 14.1% compared to net sales of $277.3 million in fiscal 3Q15.
CLSA Rated Nike as ‘Underperform’
Nike (NKE) has a market cap of $86.7 billion. It fell 0.64% to close at $52.93 per share on January 19, 2017.
Why Did Kate Spade Stock Rise on December 28?
Kate Spade (KATE) rose more than 23.0% on December 28, 2016, after the report that the company is planning to sell its businesses with the help of investment banker.
Wolfe Research Downgraded Kate Spade to ‘Peer Perform’
On November 23, 2016, Wolfe Research downgraded Kate Spade & Company’s rating to “peer perform” from “outperform.”
Goldman Sachs Upgraded Autoliv to ‘Neutral’
Autoliv (ALV) has a market cap of $8.9 billion. It fell 1.1% and closed at $100.65 per share on November 23, 2016.
Piper Jaffray Upgrades Fossil Group to ‘Neutral’
Fossil Group (FOSL) has a market cap of $1.7 billion. It rose 2.7% to close at $35.24 per share on November 21, 2016.
KeyBanc Capital Markets Upgrades Fossil to ‘Overweight’
Fossil Group (FOSL) has a market cap of $1.6 billion. It rose 8.4% to close at $35.70 per share on November 16, 2016.
How Did Fossil Group Perform in 3Q16?
Fossil Group (FOSL) has a market cap of $1.3 billion. It rose 3.5% to close at $25.58 per share on November 4, 2016.
Kate’s Stock Price Crashes on Weaker Gross Margin Warning
Kate Spade has seen YTD losses of 18%. The stock price plunged 10.2% after it warned about further margin contraction during its 3Q16 earnings call.
Macro Headwinds Pressurize Kate’s 3Q16 Comps and Gross Margin
Kate Spade (KATE) reported a 15% rise in sales in 3Q16, with total sales reaching $316.5 million.
Kate Spade Beats Earnings and Revenue Estimates in 3Q16
Kate Spade’s top line and bottom line beat Wall Street estimates, with revenue rising 15% YoY to $316 billion—nearly $5.5 million more than expectations.
Coach: Management’s and Wall Street’s Outlook
Confident about achieving fiscal 2017 guidance After a healthy first quarter, Coach’s (COH) management is expecting strong results for fiscal 2017. The company reiterated its fiscal 2017 guidance of a low-to-mid-single digit top-line increase and an 18.5% to 19% expansion of its operating margin. “We achieved growth across key financials, including sales, gross profit and […]
Comparing Stock Price Performance and Valuation
Coach’s stock has gained 12% year-to-date Coach (COH) has done reasonably well in the stock market this year. As of November 2, 2016, the company was sitting on a YTD (year-to-date) profit of 8.4%. It has outperformed the S&P 500 Apparel and Accessories index, which had fallen 5.5% YTD. Coach, along with six other apparel and accessory companies, […]
Coach Reports Improved Margins and Sales in 1Q17
Coach’s margins and sales improve Coach (COH), one of the most established players in the US affordable luxury segment, reported results for 1Q17 on November 1, 2016. As discussed in the previous two sections, the company’s sales improved 1% on strong international business and positive sales comps in North America. The company also reported an […]
1Q17: Coach Delivers In-Line Earnings, Misses on Revenue
Coach (COH) reported its results for the first quarter of 2017 before the market opened on November 1, 2016. Although the company reported earnings per share in line with Wall Street analysts’ estimates, it missed revenue estimates.
What Does Wall Street Recommend for KATE, COH, and KORS?
Wall Street has a bullish outlook on Kate Spade. The company has received 76% “buy” and 23% “hold” recommendations from analysts.
How Will Kate Spade’s Fiscal 2016 Performance Shape Up?
As a result of its second quarter headwinds, Kate Spade (KATE) lowered its full fiscal 2016 outlook.
What Drove Kate Spade’s Performance in Fiscal 2Q16?
Kate Spade’s (KATE) 2Q16 performance was characterized by a disconcerting slowdown in sales comps and a contraction in margins.
Can Kate Spade’s 3Q16 Results Boost Investor Sentiment?
Kate Spade (KATE) is set to report its quarterly earnings on Wednesday, November 2, 2016, before the markets open.
Your Quick Overview of Kate Spade’s 2Q16 Results and Stock Market Performance
Kate Spade (KATE) reported weaker-than-expected 2Q16 results on August 3, 2016, recording EPS of $0.11, as compared to the Wall Street estimate of $0.14.
Kate Spade Upgraded by Wells Fargo on Strong 2H16 Growth Potential
New York-based Kate Spade (KATE) was upgraded by Wells Fargo on September 12, 2016, to an “outperform” from a “market perform” rating.
Wells Fargo Has Upgraded Kate Spade to ‘Outperform’
Kate Spade (KATE) has a market cap of $2.5 billion. It rose 0.82% to close at $18.53 per share on September 13, 2016.
Nomura Securities Has Rated Under Armour as ‘Neutral’
Under Armour (UA) has a market cap of $16.2 billion. It fell 2.4% to close at $38.33 per share on September 13, 2016.
Who Were the Outliers in the Consumer Space on September 13?
On September 13, 2016, the S&P Consumer Staples slightly outperformed the S&P 500 and the S&P Consumer Discretionary as a whole.
Why Did VF Corporation’s Stock Price Plunge 6.7% Last Week?
VF Corporation (VFC) fell 6.7% last week (August 29 to September 2), despite having no major negative news.
Fossil Will Ship Smartwatches Based on Qualcomm Technologies
Fossil fell by 4.6% to close at $28.13 per share during the fifth week of August, with weekly, monthly, and YTD price movements of -4.6%, -4.8%, and -23.1%.
E-Commerce Provides the Necessary Cushion for PVH’s Business
PVH Corporation distributes its clothing and accessories through its wholesale partners, its own retail locations, licensing channels, and e-commerce sites.
Are Ralph Lauren’s High Valuations Justified?
On August 12, 2016, Ralph Lauren was trading at a one-year forward earnings multiple of 20x. This is the highest PE ratio for RL in the last year.
Why Were Ralph Lauren’s Retail Sales Pressured in Fiscal 1Q17?
Ralph Lauren reported a decline of 6% in global e-commerce revenues. This is unlike the general trend that has been noticed among the apparel and fashion companies.
Coach Reports Margin Improvement on Lower SG&A Rate in 4Q16
Coach (COH) reported its fourth quarter and fiscal 2016 results on August 9, 2016. Its operating margin improved from 3.9% in 4Q15 to 10.1% in 4Q16.
Evaluating Coach’s Fiscal 4Q16 Results
Coach reported a 15% YoY increase in its top line in 4Q16. Its fiscal 2016 net sales rose 7% on a reported basis and 9% on a constant currency basis to $4.5 billion.
Coach Beats on Earnings, Misses on Revenue in 4Q16
Coach (COH) reported its fourth quarter and fiscal 2016 results on August 9, 2016. The company reported earnings of $0.45 per share.
Kate Spade Stock’s Gains Were Erased after Disappointing 2Q16
Kate Spade (KATE) delivered an above-average stock market performance and gained about 21% by the end of July 2016.
Key Highlights of Kate Spade’s 2Q16 Results
Kate Spade (KATE), which reported its 2Q16 results on August 3, 2016, reported a 13.7% YoY (year-over-year) increase in its total sales.
What to Expect from Kate Spade in 2H16?
As a result of weaker-than-expected 2Q results, Kate Spade (KATE) lowered its full-year guidance.
How Does Kate Spade’s Valuation Compare to Peers?
Though Kate Spade fumbled on its 2Q16 earnings performance, it still has strong earnings potential.
What Kate Spade’s Current Valuation Could Mean
After doubling its EPS (earnings per share) in fiscal 2015, Kate Spade (KATE) is predicted to report EPS growth of 56% in fiscal 2016.
What Lies ahead for Kate Spade?
Kate Spade has predicted that its top-line growth will be in the 11.0%–13.5% range in fiscal 2016, which is in line with the consensus average of 13.5%.
How Did Kate Spade Perform in Fiscal 1Q16?
In 1Q16, Kate Spade reported industry-leading, direct-to-consumer comparative sales of 19%. The company also added 14 stores during the quarter.
Inside Kate Spade’s Key Focus Areas
KATE’s top line grew by 9.1% YoY (year-over-year) in fiscal 2015, as compared to a 7.7% YoY increase for Michael Kors and a 12.7% YoY decline for Coach.
How Is Kate Spade Positioned in the American Affordable Luxury Segment?
Kate Spade recorded total sales of $1.3 billion in the past twelve months. Michael Kors and Coach saw sales of $4.7 billion and $4.3 billion, respectively.
What’s Really Driving Kate Spade’s Sales?
Kate Spade’s primary target audience is middle- and upper-middle class consumers, particularly women, which accounted for 70% of Kate’s net sales in 2015.
Inside Kate Spade’s Business and Brands
KATE’s Jack Spade offers fashion products for men. The Kate Spade New York brand product line primarily sells handbags, apparel, and other accessories.
Understanding Kate Spade: The Affordable Luxury Brand
Based in New York, Kate Spade is a designer and manufacturer of apparel, women’s handbags, and accessories that operates under Kate Spade and Jack Spade.
How Was Ralph Lauren’s Performance in Fiscal 2016?
Ralph Lauren’s (RL) fiscal 2016 revenue rose by 1% YoY (year-over-year) on a constant currency basis. It fell 2.8% YoY on a reported basis to $7.4 billion.
How Did Fossil Group’s 1Q16 Earnings Turn Out?
Fossil Group (FOSL) has a market cap of $1.4 billion. It fell by 29.1% to close at $28.44 per share on May 11, 2016.
Are Hanesbrands’ Current Valuations Justified?
At its current one-year forward earnings valuations multiple, HBI is operating closer to the lower end of its price-to-earnings range.
Innerwear and Activewear Drive Hanesbrands in Fiscal 1Q16
Hanesbrands (HBI) reported a 1% increase in net sales to $1.2 billion for fiscal 1Q16, which ended on April 2, 2016.
How Are PVH’s Valuations Compared to Those of Its Peers?
The analyst community seems to be positive about PVH and sees the potential for further price rises from its level of $94.3 as of March 24, 2016.
How Does PVH’s Valuation Rack Up against Other Apparel Stocks?
PVH Corp (PVH) is currently trading at one-year forward earnings multiple of 13.4x on a next-12-month earnings per share of $6.57.
Kate Spade: Wall Street Says ‘Buy’
The consensus analyst recommendation for Kate Spade’s (KATE) stock is “buy,” which was given by 70.0% of the Wall Street analysts surveyed.
How Has Kate Spade Performed Historically?
Kate Spade (KATE) (VCR) has been very successful in penetrating the North American and international markets.
Kate Spade: How Did It Shape Up in 4Q15?
Kate Spade (KATE) released it 4Q15 earnings for the quarter ended January 31, 2016, on March 1, 2016.
What Jeffrey Sherman of DoubleLine Thinks about High Yield Market
Jeffrey Sherman was of the opinion that despite a rebound in equity markets, high yield investors may suffer due to volatility in the energy sector.
What Are Fossil Group’s Projections for 2016?
Fossil Group reported 4Q15 net sales of $992.5 million, a fall of 6.8% compared to net sales of $1,064.8 million in fiscal 4Q14.
Fossil Group Stock Has Been Pressured Due to Weak Fundamentals
Fossil Group’s stock opened 28% higher than its closing price on February 16, 2016, as it exceeded expectations. If we look at its post-rally price return over the last year, the stock has returned -47.3%.
How Deeply Did Fossil Group Dig in during 4Q15 and 2015?
Fossil Group (FOSL) has a market cap of $2.1 billion. FOSL rose by 28.6% to close at $44.30 per share on February 17, 2016.
Michael Kors: Stock Soars as Investors Find Value
Michael Kors stock rose on February 2. The comp numbers improved. Investors saw the value that the international business can add to the company.
Good Picture: Organic and Inorganic Growth in Retail Revenue
Michael Kors pulled off a mix of organic and inorganic growth. The company’s retail sales grew by 15.7% on a constant currency basis.
Can Coach Revive North America Same-Store Sales in Fiscal 2016?
Coach’s (COH) performance in North America remained pressured in the quarter, with sales declining 7% in reported terms to $731 million.
Transformation on Track: Will 2016 Bring a Coach Renaissance?
Affordable luxury pioneer Coach (COH) reported fiscal 2Q16 results on Tuesday, January 26, before the market opened.
Pre-Earnings Report: What We Can Expect from Coach in Fiscal 2Q16
Luxury handbag and accessory maker Coach (COH) is scheduled to declare earnings for the second quarter of fiscal 2016 on January 26.
IT Stocks Helped the Fidelity Growth Company Fund in 2015
The Fidelity Growth Company Fund (FDGRX) fell 1.0% in December 2015 from a month ago. In the one-year period, the fund is up 7.9%.
How Fossil Group Performed Compared to Peers
Let’s compare Fossil with its peers. The price-to-earnings ratios of Fossil, Coach, Kate Spade, and Guess? are 7.5x, 21.9x, 31.8x, and 18.2x, respectively.
Can Coach Improve Same-Store Sales Trends in 4Q15?
Coach (COH) will declare its 4Q15 and fiscal 2015 results on August 4. Consensus Wall Street analyst estimates project sales at $974 million in the quarter.
Opportunities and Challenges for Coach
Coach expects to realize $160 million in annual savings due to its restructuring initiatives from fiscal 2016 onward. It also expects to maintain its annual dividend of $1.35 per share.
Leading up to 3Q15 Earnings, Coach Delivers Strong Returns
Compared to its peers, Coach has provided higher total year-to-date returns to its shareholders. And, the stock’s up by over 9% since the company’s last earnings release on January 29, 2015.
Currency warfare is a way to export deflation
When a country depreciates its currency, its major trading partners depreciate their own currencies. They do this to save their economies from entering into deflation.
Why Europe Is A Long-Term Opportunity For Coach
Coach reported double-digit growth in revenues for Europe in 2Q15, due in part to growth in same-store sales and a wider distribution footprint.
Understanding Coach’s Marketing Strategies
To support its direct marketing initiatives, Coach has a database of 24 million households in North America and 10 million in Asia.
Selling Channels: How Coach Products Reach Customers
Coach, Inc. (COH) distributes products through wholesale and direct-to-customer channels. It runs wholesale shops-within-shops at major department stores.
Purse Wars: Coach Seeing Fierce Competition For Market Share
Competition is fierce in all of the affordable luxury industry. And, there are many players, including KORS and KATE.
Transformative Change Is Coming To Coach
Coach has earmarked investments of ~$570 million over the next few years to improve the look of existing stores, particularly flagship stores.
Will The Coach Transformation Plan Work?
Going forward, Coach will have to balance its need to rebuild its brand with the realities of a cut-throat and discount-seeking market.
Costs And Profitability At Coach
Coach’s transformational plan aims to return the handbag maker to “a place of best-in-class profitability and sustainable growth.”
The Risks And Threats Inherent In Coach’s Business Model
Coach risks becoming the victim of an ongoing west coast port dispute that is delaying the delivery of goods manufactured abroad.